Reviewing a wholesaler's terms of business before opening an account

A wholesaler's terms of business govern every order a retailer places, and they allocate the risk of shortages, damage in transit, faulty goods and price changes between the wholesaler and the retailer, while the retailer's own customers keep every right the law gives them. The gap between what the retailer can claim from the wholesaler and what its customers can claim from it is the retailer's margin. I review the terms from the retailer's side and return them marked up with a written explanation of what they commit the business to and the terms worth asking to change, for a fixed fee of £495 in three working days.

Who this is for

Retailers, online sellers, cafes, salons and trade buyers in England and Wales opening an account with a wholesaler, a cash and carry, a distributor or a brand's trade arm, and want to know what the terms mean for delivery, returns, pricing and payment before they commit. The retailer and the wholesaler are businesses; consumer law governs what the retailer's own customers can claim.

What to look for in a wholesaler's terms of business

Orders, minimums, carriage and the wholesaler's right to refuse

The terms will set a minimum order value, carriage charges below a threshold, a right for the wholesaler to accept or reject any order and to substitute products, and lead times that are estimates only. The review checks the minimum against the retailer's ordering pattern, asks for order acknowledgement to be binding, for substitutions to need consent, for back orders to be cancellable, and for the wholesaler's right to allocate stock in a shortage to be applied fairly.

Delivery, risk, shortages and damage in transit

Under section 20 of the Sale of Goods Act 1979 risk passes with property unless the parties agree otherwise, and wholesalers' terms pass risk on dispatch or on delivery to the carrier, so that goods damaged in transit are the retailer's problem, with claims for shortages and damage barred unless notified within days of delivery. The review asks for risk to pass on delivery to the retailer's premises, for a reasonable period to notify shortages and damage, for the retailer's signature on a delivery note not to be conclusive of condition, and for the wholesaler to bear the cost of returning damaged goods.

Faulty goods, returns and the rights you cannot pass on

The wholesaler's terms will exclude the implied terms as to quality, fitness and description in sections 13 and 14 of the Sale of Goods Act 1979, limit the retailer's remedy to replacement or credit at the wholesaler's option, and require returns within a short period in original packaging. Against a business buyer those exclusions are valid only if reasonable under section 6 of the Unfair Contract Terms Act 1977. The retailer's own customers keep their rights to reject and to a refund under the Consumer Rights Act 2015, and the review asks for the wholesaler's warranty and returns period to match what the retailer must give downstream, so that a faulty product does not cost the retailer twice.

Prices, price lists and the price at the date of delivery

The terms will say that prices are those in the wholesaler's price list at the date of dispatch, not the date of order, and that the wholesaler may add surcharges for fuel, currency and raw materials. The review asks for the price at the date of order to apply to that order, for price increases to be notified with a right to cancel outstanding orders, for surcharges to be stated and evidenced, and for promotional pricing and rebates to be recorded in writing.

Retention of title, the credit account and the guarantee

The terms will reserve title until all sums owed are paid, with a right to enter the retailer's premises and recover goods, recognised by section 19 of the Sale of Goods Act 1979 but of no use to the wholesaler once goods have been sold on. The review checks the clause, the obligation to store the wholesaler's goods separately, the credit application's terms on credit limits and their withdrawal, the credit search authority, and any personal guarantee the wholesaler asks the retailer's directors to give, which is enforceable only if in writing and signed under section 4 of the Statute of Frauds 1677.

Payment terms, interest, set-off and disputes

Payment terms will be short, with interest at a contractual rate that must be a substantial remedy to displace the Late Payment of Commercial Debts (Interest) Act 1998, an administration charge on late payment, and a clause excluding the retailer's right to set off credits for faulty or missing goods against invoices. The review checks the interest rate and the administration charge against the rule in Cavendish Square Holding BV v Makdessi [2015] UKSC 67, asks for set-off of agreed credits, for invoice disputes to suspend payment of the disputed part only, and for the wholesaler's right to stop supply to require notice.

What it costs

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

A customer returned a faulty product and we refunded them. Can we claim it back from the wholesaler?

Only within the wholesaler's returns period and on its terms, which may be shorter than the consumer's rights against you. The review checks the gap and asks for the wholesaler's warranty and returns period to match what you must give your customers.

The delivery was short but the driver's note was signed. Are we stuck with it?

The terms may say a signed delivery note is conclusive and that shortages must be notified within days. The review asks for a reasonable notification period, for the note not to be conclusive of quantity or condition, and for the wholesaler to credit shortages notified in time.

The price went up between order and delivery. Which price applies?

Under the terms, the price at dispatch, if that is what they say. The review asks for the price at the date of order to apply to that order and for increases to be notified with a right to cancel.

Related guidance and services

• Contract review, £495, the service this page describes
• Terms and conditions drafting, £995
• Reviewing a trade credit account application with a personal guarantee
• Reviewing a distribution agreement from a manufacturer

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.